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Korea Exchange, which operates South Korea's stock market, plans to establish a clearinghouse for over-the-counter derivatives late this year. Kim Jingyu, president of Korea Exchange's derivatives-market division, said the initial focus will be on interest-rate swaps between firms operating in the country.

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The Korea Exchange is seeking authorization from the European Securities and Markets Authority for its over-the-counter derivatives clearinghouse. However, regulators are struggling to differentiate between the OTC operations and listed derivatives platforms, according to an industry expert.

South Korea initially planned to mandate clearing of over-the-counter derivatives starting last month, but the requirement has been delayed until June 30. The delay was due to concerns about whether European regulators would recognize the Korea Exchange's central counterparty as adhering to certain standards.

Some industry leaders said central counterparties should be able to decide whether to clear different types of over-the-counter derivatives. The European Securities and Markets Authority originally was given power to establish binding clearing obligations. But CCPs must be considered systemically important and should be able to decide whether to take the risk, an association leader said.

A group of exchange operators from around the world asked regulators to coordinate rules for over-the-counter derivatives on a global basis to prevent arbitrage. The sector said the model should resemble the exchange model because it weathered the crisis well, while off-exchange instruments experienced liquidity issues. "The world's derivatives exchanges and clearinghouses proved their mettle during the financial crisis, but that was not necessarily the case in the largely unregulated off-exchange markets," said Ravi Narain, CEO of the National Stock Exchange of India.

A group of exchange operators from around the world asked regulators to coordinate rules for over-the-counter derivatives on a global basis to prevent arbitrage. The sector said the model should resemble the exchange model because it weathered the crisis well, while off-exchange instruments experienced liquidity issues. "The world's derivatives exchanges and clearinghouses proved their mettle during the financial crisis, but that was not necessarily the case in the largely unregulated off-exchange markets," said Ravi Narain, CEO of the National Stock Exchange of India.